Great by Choice (Jim Collins and Morten T. Hansen)

Cut to the Chase:
This is an interesting look into some companies that have thrived throughout the sometimes chaotic economic ups and downs of recent years. Similar to what he has done in his past works, Collins (working with Hansen here) researched a variety of companies and then chose the ones that significantly outperformed their peers despite similar circumstances and starting points. The book focuses on the set of companies that succeeded despite uncertain environmental influences and conditions. If you’ve read other works by Collins, it has a similar feel and ring — with a lot of well told/interesting anecdotes followed by seemingly boiled down, bare bones advice and to-dos. It’s an interesting read, though a little repetitive compared to Collins’s past works.Greater Detail:
As with his past works, Collins (and Hansen) here have sifted through performance data and given you a series of comparisons, highlighting not only the theory of what worked, but also specific examples of companies that used or didn’t a particular method. The companies that worked/were great here are called 10Xers, meaning that they were the companies that beat the industry by a factor of 10.

The ideas here are familiar. Two examples:

1. 20 Mile March talks about discipline, following a plan that is specific and has benchmarks and is a little reminiscent of his previous “Flywheel Effect” where you spin the flywheel so that it slowly builds momentum. Here the difference is that he says: spin the flywheel, build momentum, but make sure you’re marking the steps and benchmarks along the way. A great example within this book is Genentech, and how they had, in some ways, invented the “next big thing” but weren’t initially able to capitalize because they weren’t disciplined, they didn’t approach long-term goals seriously. and they hoped that they could achieve 2% four years in a row and then 90+% in the fifth and final year… which never worked.

2. Fire Bullets, Then Cannonballs talks about not being more creative or innovative, but rather taking small measured steps (small innovations) and knowing what your strengths are… first, shoot a bunch of small, inexpensive bullets as research and then load up the one cannonball after you know what works. This reminds me a bit of the “Hedgehog Concept” where you find the one thing you’re good at, and do it well. In previous books, Collins talked about how Walgreens converted to the corner model, and concentrated on convenience, getting rid of their diner-like options; here he talks about Genentech vs. Amgen and the surprising revelation that more patents (even great ones like many filed by Genentech) doesn’t lead to better profitability if it’s not managed appropriately; Amgen outperformed Genentech over the comparison period even though Genentech out-innovated Amgen.

Some of the examples are interesting outside of the business world — Amundsen vs. Scott in the race to the South Pole was interesting in that it highlighted the sometime extreme measure Amundsen went to in order to prepare for the unexpected (eating raw dolphin meat, for example). And many of the comparison are interesting just for the sake of cocktail conversation despite no longer holding true (for example, Microsoft was the successful comparison case held up against Apple, which, though both are quite successful now, was still interesting to read about). There’s also an interesting chapter on luck at the end, which gives evidence that some of best companies performed despite bad luck, even figuring out a way to learn from extraordinary bad luck (Progressive Insurance and their response to California passing a proposition which ended up hurting all car insurance companies was an example), and failing companies being completely unable to capitalize even with extraordinary good luck (like AMD, which did poorly and was unable to benefit from Intel’s missteps). The underlying message throughout is that luck and brilliant strokes of next-big-thing genius aren’t necessary, and that almost any company can recover, given the right attitude and strategy. It’s a fun, quick read, though I don’t know if I learned more than from Collins’s other works.

Comparisons to Other Books:
Unlike some of Collins’s other works (which I discovered many years later), most of the companies showcased here are still performing relatively well (since this book was published in late 2011), and so you don’t have to hold back your disbelief: you’re interested in how Progressive, Southwest, etc, came to be successful despite turbulent times. It’s interesting to take a deeper delve into Southwest, which has expanded slowly and was one of the few airline companies to still turn a profit after 9/11. In contrast, some of Collins’s earlier works (like Good to Great) unfortunately held up companies like Fannie Mae or Circuit City as their “great” examples, and are much harder to take as seriously.
Nothing against this particular book, but I’m starting to think that whatever book was your first book by Collins will be your favorite. The writing is lucid and clear and the examples interesting and compelling. But… there is a sameness to these works.